COURT FILE NO.: CV-17-580401-00CL
DATE: 2022-03-18
ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST)
BETWEEN:
DISH NETWORK L.L.C., AL JAZEERA MEDIA NETWORK, ASIA TV USA LTD., B4U U.S. INC., GEO USA LLC, MBC FZ LLC, MSM ASIA LTD., SOUNDVIEW BROADCASTING LLC, SOUNDVIEW ATN LLC, STAR INDIA PRIVATE LTD., and VIACOM18 MEDIA PRIVATE LIMITED
Plaintiffs
– and –
SHAVA IPTV NETWORK LLC, IMRAN BUTT AND NAEEM BUTT, INDIVIDUALLY AND TOGETHER DOING BUSINESS AS SHAVA TV, CRES IPTV, IRAA ENTERPRISES AND MAPLE ELECTRONICS
Defendants
Counsel: Ira Nishisato and Ashley Thomassen, for the Plaintiffs Jerome H. Stanleigh, for the Defendants, Imran Butt and Naeem Butt
HEARD: July 27, October 8 and December 15, 2021.
REASONS FOR JUDGMENT
KOEHNEN J.
[1] In reasons dated March 3, 2021 (indexed as 2021 ONSC 1582) I found the defendants Imran Butt and Naeem Butt (the “Defendants”) to be in contempt of the order of Justice Pattillo dated August 1, 2018. Their contempt consisted principally of streaming television and movie content belonging to the plaintiffs over various networks operating under the name Shava TV or variations of that name.
[2] These reasons address the appropriate penalty for their contempt.
[3] The plaintiffs seek a jail sentence of six months for Naeem and four months for Imran. The defendants submit that a conditional sentence of six months for Naeem and four months for Imran following which both will be subject to a probation period of two years would be sufficient.
Analysis
[4] The essence of the order of Pattillo J was to prohibit the Defendants from further infringing on 11 specifically named copyrights and trademarks which belong to the plaintiffs.
[5] The focus of the contempt and sentencing hearings centred on the operation of Shava TV.
[6] The plaintiffs argue that the Defendants have not purged their contempt. While there is no way to undo what the Defendants have already done by way of breach of copyright and trademark, they have, in my view, substantially ceased engaging in the offending conduct.
[7] The plaintiffs concede that Shava TV in its various iterations has ceased to operate. The plaintiffs’ complaints are of a somewhat more technical nature. By describing them as technical I do not mean to belittle the breaches but merely to describe them more as technical breaches than substantive breaches. By way of example, the plaintiffs complain that although Shava TV has ceased to broadcast, some of its servers remain operative in the sense that they could be revived and could resume broadcasting. In addition, it appears that numerous websites that relate to Shava TV are still accessible over the Internet.
[8] In addition, the plaintiffs complain that they have, on my suggestion, sent a detailed list of steps that the Defendants should take to bring themselves into compliance with the order of Pattillo J. but that the defendants have not implemented all of those steps to the plaintiffs’ satisfaction.
[9] While I sympathize with the plaintiff’s concerns in this regard, I note that the steps the plaintiffs asked the defendants to take go beyond the order of Justice Pattillo. The operative section of that order is paragraph three. It reads as follows:
THIS COURT ORDERS AND ADJUDGES that the Defendants Imran Butt and Naeem Butt are permanently enjoined from further infringing on the Plaintiffs Al Jazeera Media Network, Asia TV USA Ltd., B4U U.S. Inc., GEO USA LLC, MBC FZ LLC, MSM Asia Ltd., Soundview Broadcasting LLC, Soundview ATN LLC, Star India Private Ltd., Viacom 18 Media Private Limited, and DISH Network LLC's exclusive rights in their copyrights and trademarks.
(Emphasis added)
[10] The plaintiffs delivered a seven-page chart to the Defendants which included a lengthy, detailed list of steps that the plaintiffs wanted the Defendants to take. By way of example, item 1 on that list states:
ShavaTV servers. Permanently shut down and render permanently inaccessible all servers used by Shava TV; terminate all services, contracts, agreements, and all customer accounts, for all servers used by Shava TV; ensure that all data contained on any servers used by Shava TV is permanently and irretrievably deleted, wiped and destroyed, including any and all backup; and notify each Server Company that Shava TV has been permanently shut down due to copyright and trademark infringement, pursuant to court judgments and injunction orders granted in the US and Canada.
[11] That would appear to go well beyond paragraph three of Justice Pattillo’s order. The remaining items on the list are to similar effect.
[12] Some of the YouTube videos that the Defendants created for Shava TV continue to be accessible on YouTube and continue to display logos of the plaintiffs’ channels. The Defendants have produced a number of emails and text messages in which they make efforts to shut down some of the servers over which Shava TV operated.
[13] It is also the case, however, that Imran and Naeem have now assigned the Shava TV name, its logo and “the common law trademark rights and copyrights associated therewith” to the plaintiff Dish Network L.L.C. The agreement also obliges the Defendants to execute such further documents as may be necessary to vest title in the trademarks to Dish Network.
[14] While the Defendants’ efforts may not have been in perfect compliance with the plaintiffs’ demands, they do evidence a serious effort to comply with the order of Justice Pattillo. Most importantly, the evidence before me was that the actual streaming of program content stopped some time ago.
[15] In determining a sentence, the Court should consider:
(a) the gravity of the offence; (b) the ability to pay a fine; (c) the presence of mitigating factors; (d) the presence of aggravating factors (e) deterrence and denunciation.[^1]
[16] The offence here is serious. It was committed over a prolonged period of time in several countries. The conduct continued despite court orders in the United States and Ontario.
[17] While there is no direct evidence before me of the Defendants’ ability to pay a fine, I infer from the record that they are of relatively modest means and would not have the ability to pay a material fine. Moreover, a fine would do little for anyone. It would not provide the plaintiffs with any relief and, if anything, would only diminish the ability of the Defendants to pay a cost award in the plaintiffs favour.
[18] There are several material mitigating factors. The Defendants did ultimately stop streaming any content that belonged to the plaintiffs. They made efforts to communicate with service providers to shut down the server accounts over which the plaintiffs’ content had been transmitted. As noted, the Defendants also assigned the Shava TV name, logo, trademarks and copyrights to Dish Network. The assignment agreement should help the plaintiffs should they want to take further steps to shut down servers which they fear are not permanently disabled or if they should want to remove other Shava TV websites from the Internet. In addition, the assignment agreement commits the Defendants to never again use any of the plaintiffs’ copyrights or trademarks.
[19] The plaintiffs submit that there are numerous aggravating factors including the thousands of accounts which obtained the plaintiffs’ content through Shava TV. Although the size of the misuse of the plaintiffs’ content is serious, that is also compensated for in the judgment of Pattillo J. which recognizes the US judgment and awards damages in the amount of USD $23,850,000, USD $1,350,000 and USD $450,000 to three different plaintiffs.
[20] The plaintiffs cite as a further aggravating factor the Defendants failure to accept the Court’s findings because they continue to disagree with them. As a related aggravating factor they cite the Defendants continuing untruthfulness. The untruthfulness is based on their continued adherence to factual positions which I rejected in my reasons on the contempt hearing. I do not consider these to be much by way of aggravating factors. Although having defendants agree with judicial findings may be an aspirational goal, civil courts are more concerned with meaningful compliance with their orders than with personal agreement with their findings.
[21] The final factor to consider is deterrence and denunciation. I wholly agree that deterrence and denunciation are important concepts particularly when dealing with intellectual property which can easily be pirated to the detriment of its owners. There have already been significant monetary judgments issued against the defendants. The size of those judgments will likely ruin them financially. They will also be faced with a sizable cost award as a result of these proceedings. The potential for financial ruin provides a significant deterrent factor.
[22] Although denunciation and deterrence are important factors, even more important is that court orders be adhered to. The Defendants ultimately complied with the court order and went further by transferring all rights to Shava TV to the plaintiffs. That amounts to substantial compliance.
[23] When evaluating deterrence and denunciation, courts should also consider the effect of incarcerating defendants even though they have complied with the court order in question. I am concerned that incarcerating defendants who have complied could discourage future contemnors from complying because they would see no benefit in doing so. If a defendant faces jail even when he has complied, there is not much incentive to comply. I appreciate that in other cases it may no doubt be appropriate to incarcerate a contemnor even after they have complied. In my view, this is not one of those cases.
[24] The primary purpose of contempt is coercive, that is to say it aims to persuade a defendant to comply with a court order because the alternative to doing so is worse.[^2] The primary purpose is not to punish. Punishment is of course sometimes the only option if a defendant has refused to comply.
The Appropriate Sentence
[25] A more appropriate sentence here, in my view, is a conditional discharge subject to probation of two years less a day.
[26] The discharge is conditional on the Defendants abiding by the order of Pattillo J. during the probation period. Assuming the Defendants abide by the order of Pattillo J., they will emerge from probation without any criminal record.
[27] If either one of the Defendants breaches the order of Pattillo J. during the probation period, he will be subject to a criminal charge for breach of probation which can subject him to imprisonment of up to 4 years and will, if convicted, result in that Defendant having a criminal record.
[28] In addition, if either Defendant breaches the order of Pattillo J. during the probationary period, that Defendant will be subject to further penalties for contempt. The plaintiffs may bring such contempt proceedings before me. The penalty for any such contempt proceeding will have to take into account the fact that the Defendants were treated leniently this time around yet still engaged in further breaches of a court order. The penalty for a further breach would likely result in a jail sentence that is longer than what the plaintiffs seek now.
[29] This sentence achieves the compliance goal of contempt proceedings more effectively than would the jail sentences that the plaintiffs seek. The sentence provides a carrot and stick approach. If the Defendants take the carrot and comply with the order of Pattillo J., they will avoid jail and emerge without a criminal record. If the Defendants engage in further breaches, they will face the stick: a criminal charge for breach of probation, a criminal record if convicted and a further contempt proceeding that will in all likelihood result in a longer period of incarceration than the plaintiffs now seek. That provides substantial incentives to the Defendants to continue to comply with the order of Pattillo J.
[30] Probation orders in criminal matters are usually accompanied by certain conditions provided for in s. 731.1(2) of the Criminal Code, including an obligation to report to a probation officer and promptly notify the court or probation officer of any change of address, employment or occupation. Given the circumstances of this case, I do not believe it necessary for the Defendants to report to a probation officer. However, I will require the Defendants to notify counsel for the plaintiffs of any change of address, employment or occupation during the probation period.
Costs
[31] The plaintiffs seek costs of $752,621.81 on a substantial indemnity basis and $512,516.25 on a partial indemnity basis, including disbursements and HST. The defendants submit that costs in the range of $100,000 to $150,000 are more appropriate.
[32] I appreciate that the costs of this proceeding were high. The plaintiffs had to drill down to a level of forensic detail to obtain the evidence they did of the contempt. They then had to drill down further to refute the explanations the defendants provided. All that takes time and money. That said, the amounts the plaintiffs claim appear beyond the range of what an opponent might reasonably expect to pay.
[33] While the plaintiffs are entitled to costs I would reduce the award to a substantial indemnity award of $484,305 including HST and disbursements. In my view, that remains a generous cost award and reflects costs of $400,000 plus HST plus disbursements of $32,305.12. The reduction also reflects the fact that by the time of the final sentencing hearing, the defendants had adopted a significantly more co-operative approach than they did at the outset and gave the plaintiffs somewhat more than they may, strictly speaking, have been entitled to under the order of Pattillo J. Given the amount of the judgments that the plaintiffs have already obtained against the defendants and their likely means, the question of costs may, in any event, be more academic than real.
Koehnen J.
Released: 2022-03-18
COURT FILE NO.: CV-17-580401-00CL DATE: 2022-03-18
ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST)
BETWEEN:
DISH NETWORK L.L.C., AL JAZEERA MEDIA NETWORK, ASIA TV USA LTD., B4U U.S. INC., GEO USA LLC, MBC FZ LLC, MSM ASIA LTD., SOUNDVIEW BROADCASTING LLC, SOUNDVIEW ATN LLC, STAR INDIA PRIVATE LTD., and VIACOM18 MEDIA PRIVATE LIMITED
Plaintiffs
– and –
SHAVA IPTV NETWORK LLC, IMRAN BUTT AND NAEEM BUTT, INDIVIDUALLY AND TOGETHER DOING BUSINESS AS SHAVA TV, CRES IPTV, IRAA ENTERPRISES AND MAPLE ELECTRONICS
Defendants
REASONS FOR JUDGMENT
Koehnen J.
Released: 2022-03-18
[^1]: Criminal Code, R.S.C., 1985, c. C-46, s. 718.1 [^2]: TG Industries Ltd. v. Williams, 2001 NSCA 105, 196 N.S.R. (2d) 35, at para. 13; Chiang (Re), 2009 ONCA 3, 93 O.R. (3d) 483, at para. 11.